Indiana Casino Licenses At Risk After Casino Exec Indicted On Finance Violations

Posted on September 30, 2020 - Last Updated on October 8, 2020

Casino executive John Keeler and former state Sen. Brent Waltz have been indicted for campaign finance violations.

According to a federal indictment that came to light on Sept. 29, Keeler is charged with conspiring to funnel money into Waltz’s congressional campaign.

Waltz ran unsuccessfully for election in Indiana’s 9th Congressional District back in 2016.

Now, Spectacle Entertainment’s casino license is under the Indiana Gaming Commission’s (IGC) microscope.

Keeler works for Spectacle Entertainment, which operates the two Majestic Star Casinos in Gary, Indiana.

The company is also currently building a new Hard Rock Casino that will replace the Majestic Stars in Gary in a matter of months.

Spectacle Entertainment investigation

All of this started with a court case in Virginia.

Back in January, Charles O’Neil pleaded guilty to making illegal campaign contributions by funneling money from Centaur Gaming into Waltz’s campaign.

Centaur Gaming is where things get sticky.

Some of the officials involved with Centaur at the time are now executives at Spectacle Entertainment. Keeler is one of those executives.

Spectacle Jack, one of Spectacle Entertainment’s subsidiaries, was vying for the new license to build a separate Hard Rock Casino in Terre Haute.

O’Neil’s situation started an investigation into the company. It also made the IGC unlikely to grant Spectacle Jack the license.

Spectacle Entertainment sold Spectacle Jack to Terre Haute businessman Greg Gibson in order to clear itself from the situation.

With Spectacle Entertainment no longer involved in the project, Spectacle Jack got the green light to build Terre Haute’s Hard Rock Casino back in May.

So, Spectacle Entertainment may have washed its hands of the Terre Haute situation, but the company was still under investigation from the IGC for O’Neil’s alleged illegal campaign contributions.

Since Spectacle Entertainment is still operating the Majestic Stars and building the Hard Rock in Gary, the gaming commission couldn’t let the company off the hook entirely.

However, the IGC can only do so much on its own. It just doesn’t have the resources to investigate breaches of federal law like this.

The commission has been relying on what the federal government has been able to uncover with their investigations.

While the feds were working, there wasn’t a lot of progress happening in the Spectacle Entertainment investigation.

However, with Tuesday’s new indictment of Keeler, things are in motion again.

Keeler indictment makes things worse for Spectacle

Adding Keeler into the mix complicates things.

The IGC immediately suspended Keeler’s license, and now Spectacle’s license is in jeopardy as well.

Sara Gonso Tait, the IGC’s executive director, told the Indianapolis Star that things are now in uncharted waters.

“To say the allegations outlined in the court documents are disappointing is a vast understatement. Mr. Keeler’s indictment and the separate suitability matters under investigation by our agency create an unprecedented set of negative circumstances.”

Keeler allegedly sent over $40,000 to Waltz’s campaign.

The indictment says that Keeler used political consultant Kelley Rogers to move the money. Rogers pleaded guilty to wire fraud charges last year.

The information became public after the FBI raided Waltz’s Greenwood home on Monday.

Now things could get messy.

Since Gary’s Hard Rock casino is almost ready to open, someone is going to have to run the ship.

If the IGC pulls Spectacle’s license, there’s going to be a brand new casino in Gary with no one to run it.

The Hard Rock won’t be opening until early 2021. That provides a few months of cushion to sort the situation out.

Majestic Star Casinos

Even if the investigation is over in time for the Hard Rock’s opening, that still leaves the Majestic Star Casinos in a tough spot.

For example, if the IGC pulls Spectacle’s license next week, the Majestic Stars would have to shut down.

Even a temporary roadblock like that would be less than ideal.

The casinos already had to shut down earlier this spring because of the pandemic.

The two Majestic Star casinos took in over $9 million in combined adjusted gross revenue during August. Pulling Spectacle’s license would put a clamp on that cash flow.

The IGC could shun Spectacle from the world of Indiana gaming, but there’s no way to know for sure what will happen. We’ll be waiting to see when the IGC makes its next move.

Photo by AP Newsroom
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Jake Garza

Jake Garza is a US Gambling Industry Analyst for Catena Media. He specializes in Midwest sports betting and casino content. Prior to covering the legal gambling industry, he spent time as a professional sports writer, reporting on teams such as the Cincinnati Bengals, Indianapolis Colts and Indiana Pacers. Garza is currently working as a Managing Editor for PlayIndiana and PlayOhio, with previous stops at other well-known brands such as PlayIllinois and PlayMichigan. He has been covering the gambling industry since 2019, and currently works with a team of other journalists to provide comprehensive coverage of the legal U.S. gambling industry.

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